Court rules only 1/5 of resumed jagirs compensation to be included in estate value for duty assessment.

The court ruled that only one-fifth share of the compensation received for resumed jagirs and other properties should be included in the principal value of the estate for estate duty assessment purposes. The court held that post-resumption of jagirs, the property should be treated as Hindu Undivided Family (HUF) property, not individual property, in line with previous judgments. The decision favored including only one-fifth share in all properties, including the compensation, in the estate's principal value upon the deceased's death.

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Issues:
Interpretation of estate duty laws in the context of compensation received for resumed jagirs and other properties.

Analysis:
The case involved a reference under section 64(1) of the Estate Duty Act, 1953, concerning the inclusion of compensation received for resumed jagirs and other properties in the principal value of the estate liable to estate duty. The deceased, a jagirdar, passed away leaving behind two widows and three sons, including the accountable person. The deceased owned villages in Marwar, which were resumed after the formation of Rajasthan, leading to compensation. Initially, the Asst. Controller treated the compensation as the deceased's individual property. However, the Zonal Appellate Controller accepted the argument that the compensation was joint family property due to the abolition of jagirs in Marwar. The Appellate Tribunal, later on, ruled in favor of the Revenue, stating that the compensation should be included in the principal value of the estate for estate duty purposes.

The key question referred was whether the compensation received should be entirely included in the estate's principal value or only one-fifth share. The accountable person argued that after the jagir's resumption, the property became joint Hindu family property, with only one-fifth belonging to the deceased. Legal counsel relied on previous court decisions to support this argument, emphasizing that the property should be considered as that of the Hindu Undivided Family (HUF).

Referring to past judgments, including CIT v. Thakur Ummed Singh, the court reiterated that the property, post-resumption of jagirs, should be treated as HUF property and not individual property. The court emphasized that the compensation received for the jagir should be considered as part of the HUF estate. Consequently, the court held that only one-fifth share in all properties, including the compensation received, should be included in the principal value of the estate for estate duty assessment purposes. The reference was answered in favor of including only one-fifth share in the estate's principal value passing on the deceased's death.

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